Cholamandalam Investment and Finance Company

Healthy performance with strong AUM growth of 16%

Oct 31, 2020 06:10 IST capital market

Cholamandalam Investment and Finance Company reported strong 42% surge in the net profit to Rs 434.64 crore in the quarter ended September 2020 (Q2FY2021). The income from operations increased 15% to Rs 2358.12 crore for the quarter ended September 2020, while other income of the company declined -41% to Rs 99.79 crore. The total income increased 11% to Rs 2457.91 crore for quarter ended September 2020.

Interest expenses rose 1% to Rs 1185.09 crore. Operating expenses declined -12% to Rs 343.96 crore, allowing the gross profits to surge 44% at Rs 928.86 crore. Depreciation declined -6% to Rs 25.47 crore, while provisions and write-offs galloped 234% to Rs 317.63 crore. Profit before tax moved up 12% yoy basis at Rs 585.76 crore for quarter ended September 2020.

Effective tax rate dipped to 25.8% in quarter ended September 2020 compared with 41.3% in the corresponding quarter of previous year. Net Profit of the company improved 42% to Rs 434.64 crore for quarter ended September 2020.

Business performance

Aggregate disbursements in Q2FY21 were at Rs 6457 crore as against Rs 7381 in Q2FY20, which is a decline of 13%. Disbursements in H1FY21 were at Rs 10,046 crore as against Rs 15954 crore in the previous year registering a decline of 37%.

Vehicle Finance (VF) business has clocked a volume of Rs 4781 crore in Q2FY21 as against Rs 5796 in Q2 FY20, registering a decline of 18%. Disbursements in H1FY21, were at Rs 8012 crore as against Rs 12736 crore in the previous year, reporting a decline of 37%. Disbursements for new vehicles started picking up in the later part of the second quarter.

Loan Against Property (LAP) business disbursed Rs 1052 crore in Q2FY21, as against Rs 1064 crore in Q2FY20, with a marginal decline of 1%. The Disbursements in H1FY21 were at Rs 1171 crore as against Rs 2165 crore in the previous year, registering a decline of 46%.

Home Loan (HL) business disbursed Rs 381 crore in Q2FY21, as against Rs 414 crore in Q2FY20. The Disbursements in H1FY21 were at Rs 571 crore as against Rs 834 crore in the previous year, registering a decline of 32%.

Asset under management grew by 16% at Rs 74471 crore as compared to Rs 64409 crore as of end September 2019.

Asset Quality

Stage 3 assets stood at 2.75% with a provision coverage of 42.65%, as against 3.18% end September 2019 with a provision coverage of 34.43%. The Stage 3 assets have improved from 3.80% end March 2020.

Apart from the provision coverage represented above against stage 3 assets, additional provisions of Rs 549 crore have been created towards Stage 1 and Stage 2 assets to cover any contingencies arising out of the Covid-19 pandemic fallout.

After the ending of the moratorium on 31 August 2020, the company had over 95% of the moratorium customers starting to repay their installments till date.

However, considering the externalities in the market, on a prudent basis the Company has created additional provisions of Rs 250 crore towards macro provisions during this quarter in Stage 1 and 2. Including this, the cumulative additional provisions towards macros stand at Rs 800 crore. The total provisions, including the additional macro provisions and the normal provisions created basis the prevailing ECL model is at Rs 1688 crore, which is at 2.64% of the overall book.

The Supreme Court has directed that accounts which were not in NPA as of 31 August 2020, shall not be declared as NPA till further orders. Accordingly, the Company has not classified any new accounts as NPA after 31st August 2020. However, if the Company had classified new accounts as NPA, then the Gross Stage 3 and Net Stage 3 would have been 2.98% and 1.70% respectively.

The Capital Adequacy Ratio (CAR) of the company was at 19.51% end September 2020 as against the regulatory requirement of 15%.

Book value per share of the company stood at Rs 550.05 per share at end September 2020. The adjusted book value accounting for NNPA stood at Rs 488.65 per share at end September 2020.

Financial Performance H1FY2021

For the six-months ended September 2020 (H1FY2021), the company reported 12% increase in its income from operations to Rs 4429.26 crore compared to corresponding previous year period, while other income of the company dipped -49% to Rs 154.24 crore. Total income moved up 8% to Rs 4583.5 crore.

Interest expenses increased 2% to Rs 2315.66 crore. Operating expenses declined -7% to Rs 675.22 crore. Gross profits increased 26% at Rs 1592.62 crore in H1FY2021.

Depreciation was flat at Rs 51.12 crore. Provisions and write-offs moved up 83% to Rs 373.76 crore. PBT moved up 16% to Rs 1167.74 crore.

Effective tax rate was lower at 25.84% compared to 38.26% in the corresponding previous year quarter. Net Profit of the company surged 39% to Rs 865.94 crore in H1FY2021.

Cholamandalam Investment and Finance Company: Consolidated Results

 

Particulars 2009 (3) 1909 (3) Var % 2009 (6) 1909 (6) Var % 2003 (12) 1903 (12) Var %
Income from operations 2358.12 2042.04 15 4429.26 3953.13 12 8124.65 6576.22 24
Other Income 99.79 170.44 -41 154.24 304.63 -49 587.98 532.61 10
Total Income 2457.91 2212.48 11 4583.50 4257.76 8 8712.63 7108.83 23
Interest Expenses 1185.09 1177.60 1 2315.66 2264.44 2 4591.70 3588.14 28
Other expenses 343.96 389.68 -12 675.22 729.82 -7 1524.53 1321.18 15
Gross profit 928.86 645.20 44 1592.62 1263.50 26 2596.40 2199.51 18
Depreciation 25.47 27.03 -6 51.12 51.15 0 111.25 56.99 95
Profit before tax and Provisions 903.39 618.17 46 1541.50 1212.35 27 2485.15 2142.52 16
Provisions and write off 317.63 95.16 234 373.76 204.69 83 897.35 311.34 188
Profit before tax 585.76 523.01 12 1167.74 1007.66 16 1587.80 1831.18 -13
Provision for tax 151.12 216.07 -30 301.80 385.55 -22 534.08 634.59 -16
PAT 434.64 306.94 42 865.94 622.11 39 1053.72 1196.59 -12
Minority Interest 0.00 0.00 - 0.00 0.00 - 0.00 -1.47 -
Net Profit 434.64 306.94 42 865.94 622.11 39 1053.72 1198.06 -12
EPS*(Rs) 21.20 14.97 42.24 30.35 39 12.85 14.61
* Annualized on current equity of Rs 164 crore. Face Value: Rs 2, Figures in Rs crore, Figures as per Ind AS
Source: Capitaline Corporate Database

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